Rich Internet Applications were supposed to be the solution to client-installed software. No more dealing with upgrades or version updates, because the latest version of the application would be sent down to the client and accessed via a browser.

Then a funny thing happened: Supporters of RIAs and software as a service (SAAS) started turning on-demand applications into local applications. Making on-demand applications available when an Internet connection exists is the whole point of Google Gears, Adobe AIR and JavaFX, but doesn't that turn them into desktop applications?

It doesn't. Marc Benioff, Salesforce.com CEO and Sultan of SaaS, said the move toward RIAs is a reaction to disappointment with Vista. "What you see in Gears and Apollo and JavaFX should be in Vista," he told internetnews.com. "Where is it? Where is the offline database? Where are the procedure calls and offline capability?

"I think we're going to see a whole new generation of apps, and it's not about Microsoft anymore," said Benioff. "They are not delivering what they need to deliver, and it's too bad because what .NET should have been is what you see today from Adobe and Google and others like Sun. Because Microsoft hasn't stepped up, the rest of the industry is."

Naturally, Microsoft begs to differ. ".NET was created as a platform for enabling the creation of the richest possible user experiences spanning Windows, the Web and mobile devices," said Keith Smith a group product manager in the developer tools division at Microsoft in an e-mailed comment to internetnews.com.

Expression Studio will provide tools for professional designers to work on projects with developers in tandem. "So .NET has not failed to deliver. In fact, Silverlight proves just how .NET continues to deliver as a technology capable of spanning platforms, devices and application categories," he wrote.

Garner research director Ray Valdes thinks Microsoft erred in tying .NET so tightly with Windows, but it's a recoverable error.

"It wasn't an unreasonable strategy. Microsoft is first and foremost an operating-system company," he told internetnews.com. "At least half of it is." And he said it is becoming the Microsoft-plus-services company.

"There's a role for services from the cloud that reduces the customer's client headaches, and there's a role for software installed on client computers. Microsoft seems to be moving from packaged software only to SaaS as a dimension of its offerings," said Valdes.

Adam Gross, vice president of developer marketing at Salesforce.com , disagrees, saying that .NET is not about the Internet but about writing an application for Windows.

"When you build an app for our platform or Google Gears or Adobe AIR, you are writing an app for the Internet," he told internetnews.com. "So fundamentally, developers have to make a choice every day. Do you want to write an app for Windows or do you want to write an app for the Internet? So increasingly, .NET and Microsoft are isolated."

But Valdes disputes this. "Microsoft is evolving its offering, it's adding aspects to it, it's making the footprint smaller, it's putting it inside the browser with Silverlight for a much smoother, first-time user experience," he said. This in turn will help foster the full .Net 3.0 stack, which has grown at a slower pace.

Microsoft's Smith would not say specifically whether Microsoft would consider working with Mono, the open source port of .NET to non-Microsoft platforms. "At this time, we are focused on delivering Silverlight for Windows and Macintosh desktops, but based on customer feedback and demand, we are open to exploring other areas," he said.

Gross believes the decision will be about where to deliver applications. "The question is whether the next great apps are written for Windows or for the Internet," he said. "Can you think of one developer in the world who would rather focus on Windows than on the Internet? That's why .NET, as useful as it is, is no longer as relevant as Microsoft would like and why technologies like Gears are so important."

Valdes notes that while Adobe is going from the browser to the client in its Flash-to-AIR progression, Microsoft is going in the opposite direction with .NET to Silverlight.

"It is part of a broader industry trend, enhancing the user experience both inside and outside browsers, and also focusing on the importance of the developer experience as well as the user experience," he said.

But that also means a collision course, as Microsoft, Adobe and Google try to offer both on-demand and locally installed apps. This could be a good thing, Valdes said.

"In some sense it's all good in that there are more choices for the developer and the user. I think that anyone who wants to compete will need to execute well, look at competitor offerings, realize it's a dynamic space and everything is a moving target," he said.

Pam Deziel, director of product management for Adobe , agrees with the notion that RIAs are aligned with the SaaS model of Internet delivery, and that something like Apollo will not turn an on-demand application into a desktop app. AIR and Flash combined, she said, give it the versatility and option of choosing how to deliver its applications.

"A significant portion of apps can benefit in substantial ways from being created and delivered [over the Internet]," she told internetnews.com. "Apps that benefit from the transactional and time-based nature of what the user is trying to do are well-suited to the 24/7 world we are in today."